Hungary's economy is booming and the standard of living of Hungarians has improved dramatically over recent years

Hungary's economy is booming and the standard of living of Hungarians has improved dramatically over recent years, it has been revealed.

According to official figures, Hungary's economic policy based on wage hikes and tax cuts has created stable and rapid economic growth.

Mihály Varga, minister for National Economy, revealed the news following the release of the latest GDP flash report of 2017 from the Hungarian Central Statistical Office (KSH).

In Q4 2017 and in the year 2017, the volume of GDP grew by 4.4 percent and 4.0 percent year-on-year, respectively.

One-fourth of last year’s growth, some 1 percentage point, has been the result of the economic stimulus generated by the six-year wage and tax agreement concluded in November 2016.

Varga noted that positive trends have also brought palpable benefits for Hungarian households. Owing to the 12.8 percent wage hike and 70,000 new jobs, employees earned some 1,100bn HUF more in 2017 than the year before, and this has boosted the standard of living, he said.

The growth of the Hungarian economy has been stable, sustainable and broadly based. The general government budget deficit was low -- some 2 percent -- last year, and this has also caused the general government debt-to-GDP ratio to edge lower, the minister said.

From an international perspective, the expansion of the Hungarian economy continues to significantly exceed the growth rate of the EU - the latest flash report of the Eurostat shows that growth averaged 2.6 percent last year.

The ministry for National Economy is expecting GDP growth of 4.3 percent this year. The recent wage and tax cut agreement as well as the reduction of corporate income tax to 9 percent will continue to have a stimulating effect on the economy, along with the strong performance of the construction sector, the minister said.